Mayowa Alli and Dolapo Adejuyigbe are former McKinsey consultants behind Traction, a fintech that allows small companies to receive payments, manage accounts, and access operational tools. 

The idea for Traction was influenced by the duo’s time working at McKinsey, which included devising financial inclusion initiatives in Nigeria. Their work in Nigeria exposed them to the challenges of small and medium businesses across the West African country, according to Tech Crunch.

In Nigeria, small businesses constitute the backbone of the economy. Per data cited by TechCrunch, small businesses account for 60% of GDP and offer jobs. Of the number of SMEs estimated to be around 39 million, over 80% operate in the informal sector where access to loans is always difficult.

This means that a large number of SMEs in Nigeria do not have the capacity to develop by accessing digital tools and financial services like credit, savings, business, and payment solutions. They also struggle to access banking solutions from big financial institutions.

Co-founder Adejuyigbe told Tech Crunch that banks lack a comprehensive understanding of SME activities and provide inadequate financial services. As a result, he and Ali decided to create a “bank-agnostic platform that would enable an end-to-end sales payment cycle as well as access to additional services to assist these firms in growing.”

For Alli and Adejuyigbe, Traction is a timely intervention to resolve the financial needs of SMEs in Nigeria and West Africa at large.

“That has been our thesis from day one. It was like an organic product journey built from what we had understood, interviewing and meeting prospective SMEs or customers,” said the fintech’s co-chief. “What that affirmed was essentially like an offline merchant acquiring model that we’ve also seen in the U.S. with Square, in Latin America with StoneCo, in Europe with SumUp and BharatPe in India. It’s a clear playbook that has guided what we’ve built to date.”

Traction serves two categories of merchants — classic and premium — who cut across sectors like food and restaurants, FMCG and grocery chains, fashion, beauty, and lifestyle enterprises, electronics stores, and healthcare facilities.

The first category makes up 75% of the platform’s user base and that category includes street food sellers and small neighborhood convenience stores. The second category includes more formal merchants who have left banks for Traction. In effect, Traction does not only enable merchants to receive payments and manage accounts but also gain access to a range of tools including a full retail POS system, E-commerce, and invoicing. At the same time, the fintech platform helps small businesses to access capital to keep running their businesses.

Traction, which has been running for three years, saw a 7x increase in revenue and an 8x increase in transactions last year while serving over 70,000 businesses across Nigeria, according to Tech Crunch. It has also disbursed over N2 billion ($2 million) in loans.

Meanwhile, Traction recently announced a $6 million seed round anchored by Pan-African investor Ventures Platform and Multiply Partners, with participation from P1 Ventures and other investors.